Zoom zapped with a class action lawsuit

SAN JOSE: Zoom Video Communications was slapped with a class action suit by one of its shareholders Tuesday, accusing the video-conferencing app of overstating its privacy standards and failing to disclose that its service was not end-to-end encrypted.

A shareholder, Michael Drieu, on Tuesday accused the video-conferencing app maker of overstating its privacy standards and failing to disclose that it had not provided end-to-end encryption for its service.

The shareholder also claimed the string of recent media reports about the app’s privacy flaws have hurt the company’s high-flying stock.

Zoom Video Communications’ shares have lost nearly a third of their market value since hitting record highs in March. But they’re still up 67% so far this year, making them one of the few winners amid the massive market sell-off.

That’s because Zoom has mushroomed in popularity. Millions of new users worldwide have signed up as they’re forced to work from home amid lockdowns.

But the company is also facing a backlash from users worried about the lack of security and the phenomenon of “zoombombing,” where uninvited guests crash into meetings. SpaceX has banned staff from using Zoom.